Stock projection

The stock projection functionality has been designed to provide greater visibility of what is likely to happen to your inventory based on the data and inventory policy settings currently in the App.

From your stock position today, it works forward to predict your stock levels, your fill rate and your spend with your suppliers for the next year.

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The projection is an important tool to assess whether your inventory policy settings have the desired outcome.

 

Summary tab

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The Summary tab provides an overview of the projected health of your inventory over the next 12 months, including:

  • Whether your inventory value is coming down

  • Whether your fill rate and stock turns are increasing

  • The forecast demand value

  • The value of ideal order recommendations

  • When existing purchase orders and ideal order recommendations are projected to be receipted

The information can be:

  • Filtered; click the Filter button and specify what part of the business to run the projection for eg. stocked items

  • Downloaded to a CSV; click the Download button to create a CSV file containing the filters used to run the projection AND the values for each of the graphics shown on the summary tab, by month for the next 12 months

 

Components of the summary tab

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Hovering over the line graph displays the value at that point.

The Inventory graphic projects your closing stock value, where:

  • Apr 2018; shows your stock value as at today (2.6m)

  • The blue line; charts the closing balance at the end of each month, starting from the end of this month (3.1m)

    • The value may go up from today's stock value due to orders still to be receipted before month-end

  • Mar 2019; shows the projected stock value in 12 months time (2.6m)

 

The Fill rate graphic projects your product availability to your customers and should be viewed in conjunction with the Inventory graphic.

In this example: the fill rate is projected to increase significantly (6.30%) while the inventory value increases slightly (1.18%). With a better balance to your inventory, this should also result in an increase in sales.

Check the relationship between inventory value and fill rate. A good inventory result is typically one of the following:

  • Investment in inventory reduces and fill rate increases

  • Investment in inventory stays the same but fill rate increases

  • Fill rate stays the same but investment in inventory reduces

 

Stock turns is a measure of how many times you will sell your stock on hand value over the next 12 months.

A good outcome for stock turns is that the projected stock turns at the end is more than the stock turns at the beginning.

 

The Demand graphic shows the total forecasted demand value, by month, for the next 12 months, where:

  • Total demand represents the sum of all demand streams, including forecasted sales from this location, central warehouse demand, and bill of materials (manufacturing) demand

  • The first point shows the demand for the remainder of this month, whilst every other point shows the demand for the entire month, therefore this point may be significantly lower if your projection is done towards the end of the month

 

The Recommended orders graphic shows the next 12 months of ideal recommended orders, over-and-above what you already have on order.

 

The Receipts graphic shows when orders should be delivered, including:

  • Receipts for existing/outstanding purchase orders (brown bars)

  • Receipts for the ideal recommended orders in the graphic above (green bars)

 

Inventory tab

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The Inventory tab is an extrapolation of inventory values for 12 months into the future, based on current stock data, inventory policy parameters and demand forecasts, highlighting:

  • Closing stock; the closing stock for the next 12 months (blue line)

  • Excess stock; inventory identified to be above what is required (the red band)

  • OK; balanced inventory (light grey area)

  • Firm receipts; receipts for existing/outstanding purchase orders (brown bars)

  • Projected receipts; receipts for order recommendations (green bars)

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Clicking on the Table button displays the data used to plot the inventory graphic in tabular format.

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Projected values are all calculated using average cost, which enables a like-for-like comparison.

 

Fill rate tab

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The Fill rate tab shows:

  • Fill rate; a measure of our ability to supply our customers

  • Stock turns; a measure of how many times you will sell your stock on hand value over the next 12 months

  • Cover days; a measure of how long your stock on hand will last

A good outcome is:

  • Fill rate increases

  • Stock turns increases

  • Cover days decreases

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Clicking on the Table button displays the values for Fill rate %, Stock turns and Cover days in tabular format.

 

Replenishment tab

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The Replenishment tab shows:

  • Recommended orders (light brown bars); the next 12 months of ideal recommended orders, over-and-above what you already have on order

  • Firm receipts (brown bars); receipts for existing purchase orders

  • Projected receipts (green bars); receipts for the ideal recommended orders

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Clicking on the Table button displays the values for Recommended orders, Projected receipts and Firm receipts in tabular format.

 

Demand tab

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The Demand tab shows all predicted demand streams for the next 12 months.

NOTE: your business could have one or more streams of demand, including:

  • Forecast demand (blue area); forecast sales to customers from this location

  • Customer orders (purple area); firm customer orders

  • Bill of materials (BOM) demand (brown area); manufacture in this location

  • Central warehouse (CW) demand (green area); supply to other locations from this location


 

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Clicking on the Table button displays the values for Forecast, BOM demand, CW demand and Customer orders in tabular format.

 

The importance of filters

Filters are used to determine which groups of items are used to calculate the stock projection.

 

Select an available filter

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If the filter you wish to view has already been defined, simply select it from the drop down.

In this example there are two available filters, namely:

  • Stocked items

  • A Items

 

Define and save a new filter

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Click on the filter button to define and save a new filter.

  1. Specify the criteria

  2. Give the filter a name

  3. Click the Save button

In this example the stock projection will only calculate for:

  • Stocked items

  • In location "W01 - ABC Warehouse"

 
 

Please contact me

Please complete the form below if you would like us to contact you regarding activating the Stock projection functionality in your environment.

Please note: The stock projection module is an optional module, which can be enabled with a small increase to your monthly subscription fee.